Transnet plans hydrogen terminals as SA gears up for exports
Strengthening the ports
Transnet National Ports Authority is finalising plans to install hydrogen terminals at commercial ports to boost South Africa's hydrogen exports within the next decade.
Transnet National Ports Authority (TNPA) says it is finalising plans to install hydrogen terminals at commercial ports, with SA set to export the gas within the next 10 years. Last year, the ports authority issued a request for information – a call to companies ahead of an expected tender – for the export and import of hydrogen initiatives, including green hydrogen, green ammonia, green methanol, and grey hydrogen, at the Cape Town, Durban, East London, Mossel Bay, Ngqura, Port Elizabeth, and Saldanha ports.
Speaking at African Oil Week this week, TNPA general manager for special projects, Luvuyo Mkontwana, said the South African market focus on exporting hydrogen to European and Asian markets.
"As a ports authority, it is our role to accelerate these projects [...] There is a lot of international interest in hydrogen with Japan and Chile already exporting this product. A big market will be coming through, but we want to do it early on. There is already commercial interest," he said at a media briefing.
Green energy
Hydrogen is produced through electrolysis, where an electric current is passed through water to split it into hydrogen and oxygen. When the electricity comes from renewable energy — solar PV or wind—no carbon emissions are released, so the product is dubbed "green" hydrogen.
However, when a fossil fuel like coal or gas is used as an electricity source, emissions are released, which is why the product is known as "grey" or regular hydrogen. Hydrogen production through fossil fuels, coupled with technologies that can capture carbon emissions, is called "blue" hydrogen.
Green hydrogen has become increasingly more popular and competitive among countries for export. According to South Africa’s Just Energy Transition (JET) implementation plan, between 2023 and 2027, R319 billion in funding will be needed for the green hydrogen sector's infrastructure and production capacity.
Last month, the European Union granted Transnet R630 million to assist the state logistics company in achieving its net-zero ambitions, with a R140 million first grant given for Transnet to support the green hydrogen ecosystem in the country. Transnet aims to achieve net zero by 2040.
Get it 'on track'
According to President Cyril Ramaphosa, the hydrogen economy has the potential to add almost 4% to the country's GDP by 2050 and create 370 000 jobs.
Other projects, including the Boegoebaai port in the Northern Cape, are under way to develop a green hydrogen export hub in SA. Earlier this year, the Centre for Scientific and Industrial Research (CSIR) was appointed to assess the environmental impact of the new port. According to Bloomberg, the R50-billion port is expected to become operational in 2030 and have connected rail links for transport in 2036.
Meanwhile, Mkontwana said there was an urgency to get SA's hydrogen exports on track.
"If we can capture the market sooner, we need ports that will hold the fort and be able to export that hydrogen in the meantime. We do not want to stifle the market, so as soon as we have the facilities to export hydrogen," he said.
He said UK-based Hive Energy, which has an office at the Eastern Cape Coega Special Economic Zone, has been collaborating with the ports authority to develop a hydrogen export terminal. The company aims to establish five large-scale hydrogen and ammonia plants in the country to power 15GW of renewable energy, including a $4.6-billion (R80-billion) green ammonia plant to power the special economic zone.
"It is difficult to say when we will start exporting, but within the next 10 years, South Africa will have its first hydrogen export. Hive has already put down their dates, and we are working with them," said Mkontwana.
Green rating
According to Mkontwana, installing hydrogen and gas terminals forms part of decarbonisation efforts at ports to ensure that SA ports are more globally competitive and have a higher "green rating".
Earlier this week, Transnet Pipelines announced plans to install a gas terminal for liquefied natural gas (LNG) imports and exports at the Richards Bay Port. The entity and Vopak have already been announced as terminal operators for the R14-billion project.
With the country facing gas supply issues, the terminal is set to open in the 2027/28 financial year.
Similar LNG gas terminals are also expected to be developed at the Nqura and Saldanha Ports. An environmental impact assessment is currently being completed for the LNG terminal at the Ngqura Port.